YOUR 2015 W-2 What You Need To Know! If you pay a deduction to the State Retirement System, remember to include the State Pickup Amount from the first line of box 14 1abeled "STPICKUP" of your W-2 on your Maryland tax return! State Pickup Amount If an entry labeled as "STPICKUP" appears on the first line in box 14 of your W-2, you must enter that amount on line 3 under Additions to Income of Maryland Form 502 or line 19 under Additions to Income of Maryland Form 505 and enter code "G. "The pickup amount is the mandatory retirement deductions that you paid during the year that are not subject to federal tax, but are subject to Maryland state and local tax. If you are due a refund on your Maryland tax, failure to add the "state pickup amount" on your 502 or 505 Maryland tax return may result in your refund being delayed. Payroll Online Service Center! http://comptroller.marylandtaxes.com/government_services/state_payroll_services/ The Payroll Online Service Center (POSC) provides services that have been requested by state employees. You can obtain duplicate copies of your current and prior year W-2, update addresses and direct deposit, and view current & prior year pay stubs. The system is designed for use by all State government active and recently retired employees who are I were paid by the Central Payroll Bureau; and for use by authorized State government payroll representatives. First time users are required to execute the Sign Up process. This requires some personalized data and unique information found on your most recent pay stubs (pay stub information received within the last 8 weeks, must be used).this process will help you generate a Logon ID and Password that will be used each subsequent time you access the POSC.
****Additional Medicare Tax **** Employers are required to withhold 0.9% Additional Medicare Tax on any Federal Insurance Contributions Act (FICA) wages it pays to an employee in excess of $200,000. The additional withholding will continue until the end of the calendar year. It is only imposed on the employee. The normal and additional withholding will be combined and reported in box 6 Medicare tax withheld. **** Health Plan Cost Reporting **** The Patient Protection and Affordable Care Act of 2010 requires that employers report the total aggregate cost of group health plan coverage to their employees annually on their W-2s. Although this cost is included on the W-2 (in Box 12, under Code DD), it is informational only and is not included in taxable income. The aggregate cost of coverage that is reported on the W-2 is based on what you pay toward the Pharmacy plan, Basic Health Insurance, and the subsidized amount the State of Maryland pays toward your plan Comparing Your Last Pay Stub To Your W-2 When you look at your W-2 form and your final pay stub, the numbers may not look the same. There is a reason, and it's to your benefit. Here's why! Your pay stub is a statement of what you actually earned in wages and paid in taxes and deductions. It is also a statement of what the state paid in fringe benefits. Your W-2 is a wage statement that reports the taxable portion of your earnings to federal and state governments. To understand how we arrive at these figures let's take a look at the following areas. 1. Tax sheltered deductions During the past calendar year, deductions for dental, pharmacy plans, health insurance and certain other voluntary deductions were exempt from all federal, Social Security (FICA) and state and local taxes. In addition, mandatory employee contributions to some retirement programs have been exempt from federal income tax, but not from Maryland income tax or Social Security (FICA). Some other voluntary deductions, such as deferred compensation, are not subject to federal or state and local tax, but are subject to Social Security tax. 2. Wages subject to Social Security taxes Deferred compensation contributions are subject to Social Security tax. Your deferred compensation is shown in box 12a through 12d of the W-2 form along with a federal identification code. 3. Wages subject to Federal income taxes The amount shown in box 1 on your W-2 form is the amount that you report on your federal income tax return. 4. Wages subject to Maryland income taxes The amount shown in box 16 on your W-2 statement represents your Maryland state taxable wage. The State Pickup Amount (first line on box 14 of the W-2) should be reported on line 3 under Additions to Income of Maryland Form 502 or line 19 under Additions to Income of Maryland Form 505 using code "G.
How Did We Arrive At The Taxable Amounts Reported on Your W-2? This example will help you compare figures on your W-2 and final pay stub. Look at the final pay stub in the example: The year to date (YTD) regular earnings are $58,515.00 and Acting Capacity earnings are $596.34. The employee in the example actually earned $59,111.34. Of that money, the amount that will be reported on the W-2 is different because of tax sheltering, pretax deductions and the state pickup amount (see #4 on the previous page, Wages subject to Maryland income tax ). It is important to understand that your final pay stub is your record of the actual wages you earned, the taxes and deductions you paid. The W-2 is a statement of only the taxable portion of those earnings that are reported to the taxing authorities. $43,777.73 was subject to federal income tax (Box 1 of W-2) $55,226.94 was subject to FICA (SS/MED) tax (Box 3 and 5 of W-2) $43,777.73 was subject to Maryland income tax (Box 16 of W-2) as is the $4,149.21 ( STPICKUP Box 14 of W-2).
1. Compare figures on your W-2 : 2. Wages subject to Federal income taxes: The amount shown in box 1 on your W-2 form is the amount that you report on your federal income tax return. Box 1 does not include the total aggregate health cost amount shown on the W-2 in Box 12, code DD. This is informational only to show the value of your health plans. To reconcile the Federal wages reported in Box 1, subtract only the Federal exempt deductions from the year-to-date earnings shown on your final pay stub. Y-T-D Earnings 59,111.34 Federal Sheltered Deductions 15,333.61 Box 1 of W-2 $ 43,777.73 The final pay stub lists the following YTD Federal tax sheltered deductions: Pharmacy Plan 689.12 UCC Dental DPPO 232.80 Depn Care Acct 1666.64 St Emp Alt Pen 4,149.21 401(k) Save 7,300.00 CF BCBS EPO (Health) + 1,295.84 Federal Sheltered Deductions $ 15,333.61 If you claimed EXEMPT from taxation, you may not have federal taxes in Box 2; however, you will still have federal taxable wages reported in Box 1.
3. Wages subject to FICA taxes Deferred compensation and retirement/pension contributions are subject to Social Security and Medicare (FICA) tax. The amount of 401(k), in this case $7,300.00, is shown in Box 12a of the W-2 [along with a federal identification code]. To locate the federal identification code, please refer to the back of your W-2. The retirement/pension contribution of $4,149.21 is exempt from federal, but not FICA. To reconcile the FICA wages reported in Boxes 3 and 5, subtract only the FICA exempt deductions from the year-to-date earnings shown on your final pay stub. Y-T-D Earnings 59,111.34 FICA Sheltered Deductions 3,884.40 Boxes 3 and 5 of W-2 $ 55,226.94 In this example the final pay stub lists the following YTD FICA tax sheltered deductions: Pharmacy Plan 689.12 UCC Dental DPPO 232.80 Depn Care Acct 1,666.64 CF BCBS EPO (Health) + 1,295.84 FICA Sheltered Deductions $ 3,884.40 4. Wages subject to Maryland income tax To reconcile your W-2 Maryland state wage Box 16 to your YTD amount on your final pay stub, use the method listed below. In most cases, Boxes 1 and 16 will display the same wage amount. You will need to add Box 1 Federal wages, Box 14 State Pickup, and Maryland Sheltered Deductions. State Pickup retirement/pension contributions are exempt from Federal taxation, but are taxable for State. Box 1 of W-2 43,777.73 Box 14 of W-2 (STPICKUP) + 4,149.21 Maryland Sheltered Deductions + 11,184.40 Y-T-D Earnings $ 59,111.34 YTD Maryland tax sheltered deductions: Pharmacy Plan 689.12 UCC Dental DPPO 232.80 Depn Care Acct 1,666.64 401(k) Save 7,300.00 CF BCBS EPO (Health) + 1,295.84 Maryland Sheltered Deductions $ 11,184.40 YTD retirement/pension contributions: St Emp Alt Pen $ 4,149.21 If you claimed EXEMPT from taxation, you may not have state taxes in Box 17; however, you will still have state taxable wages reported in Box 16.
5. You may be eligible for an Earned Income Credit! The earned income credit (EIC) is a tax credit for certain people who work and have earned income below a certain amount. A tax credit usually means more money in your pocket. It reduces the amount of tax you owe. The EIC may also give you a refund. For 2015 income limits and more information, visit www.irs.gov/eitc. Also see Publication 596, Earned Income Credit. Any EIC that is more than your tax liability is refunded to you, but only if you file a tax return. Getting Help! State (Phone). Comptroller of Maryland's Taxpayer Service (410) 260-7980 or (800) MD-TAXES is available 8:30 a.m. - 4:30 p.m. Monday through Friday. Extended hours for telephone assistance from February 1 - April 18, 2016 is available from 8:30 a.m. - 7:00 p.m. Monday through Friday except State Holidays. State (Email). Email service is available by contacting taxhelp@comp.state.md.us. Please include your name, address and last four digits of your Social Security Number in your email message. This will help to generate a quick response to your inquiry. Federal (Phone). For federal filing questions, please call IRS (800) 829-1040. Keep this information with your tax records. Thank you for visiting our Web site.